K-REAT: homebuyers must claim GST on cancelled flat from tax authorities, not builder
The Karnataka Real Estate Appellate Tribunal set aside a K-RERA order directing Goyal Hariyana Developers to refund Rs 59,638 GST to two homebuyers who cancelled a booking, and told the builder to issue credit notes.
Key points
- The Karnataka Real Estate Appellate Tribunal allowed the builder's appeal and set aside the K-RERA order only as far as it directed a refund of Rs 59,638 deducted as GST.
- The tribunal held on 6 November 2026 that GST paid in the homebuyers' name must be claimed by them from the tax authorities, and directed the builder to issue credit notes or a certificate.
- Homebuyers who cancel a booking should expect to recover GST already paid on their behalf from the tax department, using the builder's documents; the judgment may be appealed to the High Court.
Photo: City of Chichester / Wikimedia Commons, public domain (cropped). Representational image.
On 6 November 2026, the Karnataka Real Estate Appellate Tribunal (K-REAT) allowed an appeal by Goyal Hariyana Developers against a K-RERA order directing it to refund Rs 59,638 deducted as GST when two homebuyers cancelled a flat booking in its Bengaluru project Orchid Bloomsberry. The tribunal held that GST paid in the buyers' name must be claimed by the buyers from the tax authorities, and directed the builder to issue credit notes or a certificate to enable that refund.
What Happened
The homebuyers booked flat D-1001, signed an agreement for sale on 26 October 2023 and paid an advance of Rs 12,52,402, the judgment records. They cancelled after objecting to a property transfer charge of Rs 400 per square foot. The builder refunded Rs 11,80,716 after deducting Rs 12,050 for e-stamp paper and Rs 59,638 as 5% GST. The buyers complained to K-RERA, also seeking compensation for the eight months their money was held.
On 15 September 2025 the K-RERA Adjudicating Officer ordered the builder to refund the GST within 60 days, with interest at MCLR plus 2% a year on default, and Rs 7,000 as litigation cost. The e-stamp deduction was upheld and the buyers did not appeal that.
Before K-REAT, the builder argued that the Adjudicating Officer lacked jurisdiction and that the booking form allowed the deduction. The tribunal rejected the jurisdiction plea, since compensation was also claimed and an enquiry under Section 72 of the RERA Act was needed. On GST, it found the builder had raised invoices for the tax on behalf of the buyers, in their name, so after withdrawal only the buyers could claim it back from the department.
What It Means
K-REAT set aside the K-RERA order only as to the Rs 59,638 GST. The buyers may apply to the tax authorities for that sum, and the builder must issue the credit notes or certificate they need. The builder's deposit with the tribunal will be released to it, with interest, after the appeal period. For homebuyers who cancel a booking, the judgment indicates that GST already paid on their behalf is recovered from the tax department, not the builder. A K-REAT judgment may be appealed to the High Court.
Source: K-REAT judgment
Sources & Citations
- K-REAT judgment — Karnataka Real Estate Appellate Tribunal